One of those involves our current local renters, and how this month’s low home loan interest rates impacts their housing choices. Put simply, many first time homebuyers are being attracted to the value proposition newly presented by local bank owned homes. The increase in the number of bank owned homes is part of the fallout from previous high foreclosure levels. Combined with the current low mortgage rates, the result is that, for the first time in a long time, some area renters may now be able to afford to buy a home for the same cost (or less!) they are currently paying in rent.
Before anyone jumps at the chance to become a new home owner, though, they will be wise to take a look at some of the additional factors that come into play in any decision about whether to purchase one of those local bank owned homes.
FHA loans are a key factor in making bank owned homes affordable. These government-backed mortgages offer relatively lenient lending standards and low down payment options. Yet the very same loans can also present the first time homebuyer with a considerable stumbling block.
To qualify for an FHA loan (as well as for some conventional loans), a home must be in what is deemed “saleable” condition. And bank owned homes - while often a great deal - can come with glaring problems that must be addressed before the ‘salability’ hurdle is cleared. Major foundation issues, for example, are pricey fixes. Old, leaking roofs can also cause a loan to be held up. Missing kitchen appliances, broken windows, falling-down fences are all items that can maddeningly delay or even derail the sale of local bank owned homes.
Still, the idea of finding a great bargain cannot help but intrigue many current renters. And there are great deals to be had for those who pencil out the potential advantage that might result from targeting local bank owned homes.